Canada's first trial under the Corruption of Foreign Public Officials Act (CFPOA) concluded with a conviction on August 15, 2013. Justice Hackland of the Ontario Superior Court found Nazir Karigar, a Canadian businessman, guilty of agreeing with others to offer a bribe to an Air India official and another Indian government official, contrary to the CFPOA. Although three companies have previously pleaded guilty under the CFPOA, this is the first case to go to trial and the first conviction of an individual under the CFPOA.

Karigar was sentenced to three years imprisonment on May 23, 2014.

Background

While working with his company, CryptoMetrics Canada, to submit a bid to sell facial recognition technology to Air India, Karigar met with colleagues in India and the issue was raised that Indian officials would have to be paid in order to win. Shortly thereafter, Karigar provided his VP of business development with spreadsheets listing various Air India officials and how much money each official should be offered. In March 2007, the CEO of CryptoMetrics USA entered into an agreement with Karigar to transfer $250,000 USD to his personal bank account in India in order to “secure the Air India contract.” If the contract was not won, the money would be returned to the company.

Although the evidence did not prove that bribes were actually paid to specific public officials, the trial judge found that the evidence proved beyond a reasonable doubt that Karigar conspired with others to offer bribes to obtain the Air India contract.

Our August 2013 legal update provides additional background facts and discussion of the case.

Sentence

The sentencing hearing took place in January 2014, and Justice Hackland considered arguments by the Crown and the defence as to the type of sentence Karigar should serve, and for how long. The Crown argued that Karigar should receive four years imprisonment, while the defence argued that he should receive a conditional sentence.

Ultimately, Karigar was sentenced to three years imprisonment.

Justice Hackland considered both aggravating and mitigating factors. There were four aggravating factors considered, with emphasis on the first factor: 1) the scheme was sophisticated, carefully planned, involved senior members of the company, and would have had benefits to the company in the millions of dollars; 2) Karigar relied upon insider information; 3) throughout the trial, Karigar acted with a sense of entitlement; and 4) Karigar personally conceived of the scheme, who should be paid, and the amounts to pay.

There were three mitigating factors, with emphasis on the final factor: 1) Karigar cooperated with the investigation; 2) he was a respected businessman with no previous criminal record; and 3) the scheme ultimately failed and any potential harm from the scheme was restricted.

Justice Hackland also emphasized the dual purposes of criminal sentencing, which are denunciation and deterrence. He also made reference to Canada’s international treaty obligations and the importance of taking these into consideration when determining an appropriate sentence.

Karigar can appeal both his conviction and his sentence within 30 days.

Importance of the decision

This is an important decision in Canada, as it marks the first time an individual has been convicted under the CFPOA. The sentence was imposed under the previous legislation that had a maximum sentence of five years imprisonment, but it serves as important benchmark for future sentencing under the CFPOA.

The legislation has since been amended to increase maximum imprisonment to 14 years. In addition to longer prison terms, conditional sentencing, including house arrest and community service, will not be permitted for any offence committed after the coming into force of the Safe Streets and Communities Act in November 2012.